Agricultural Bank Of Chin

Han Guoqiang, secretary of the board of directors of the Agricultural Bank of China, ABC. So the wind is very cool and the sky is very clear. In this picture-risk early autumn season, we are very pleased to have with us the investors, journalists, and analysts to attend 2022 interim results announcement conference of ABC. I would like to extend a warm welcome to all of you for your gracious presence. And I would like to express my sincere gratitude to all the sectors of the society for your long-term concern and support. Thank you. Well, for this interim results announcement, we have Mr. Gu Shu personally led the senior management to attend the performance conference and set up these online telephone and offline communication with the -in-one mode. So this meeting would facilitate friends and investors both at home and abroad to have a full interaction. So now I would like to introduce the senior management representative of Agricultural Bank of China who attends the conference today. They are Mr. Gu Shu, chairman and executive director of Agricultural Bank of China. Mr. Zhang Xugong, executive director and vice president of Agricultural Bank of China. Mr. Ling Li, executive director and vice president. Mr. Xu Han, vice president. And Mr. Wang Tingxi. And Mr. Liu Shidong will come to the conference via the telephone, independent director. And we have two parts today. The first part will be introduced by me about the operating results of H1 this year. The second round is interaction, responding to the concerns and the questions from the analysts and friends from the media. Now let's have the first session. I will introduce the operating results of ABC in H1. For H1 2022, ABC has confidentially implemented this development of economy should be maintained while preventing and controlling the pandemic. We have made the progress of our own business and we still have already got this resilient development of all the operation. The first is the efficiency has been maintained very stable. So we have 287 billion of the profit up by 5.9%. And for growth margin is up by .86% and for net profit is up by 4.9%. For this investment return is 0.84%. The second one is about the scale of our business is coming to another height. So the first is our overall asset is over 32 billion, a trillion and with 1.6 trillion of the newly issued loan and up by 9.6%. So for the deposit we have is a 26.3 trillion and increased by 2.7 trillion RMB. So for business related deposit is reaching 8.93 trillion for our deposits and the total amount is all taking a lead among the industry. And the second thing is finished. The third is we focus on the new growth but the newly issued loans are going to this major project, green development, technological innovation, key projects, et cetera. So for this project loan is 474 billion RMB. So for manufacturing industry loan is for 2.1 trillion RMB up by .5% for mid and long term loans is up by .3% taking a leading lead in industry. So for this green industry it is reaching 2.37 trillion RMB. So serving this small and medium sized business to making the benefit from here. We have 1.27 trillion RMB issued to this small and medium sized company. And we actively reduce the payment and give our profits to the companies. And with the impact of the pandemic, we have given them 2.5 trillion RMB for the bond investment. We have reached a record high of this support for the local government reaching 56.38 million RMB. So as this leading bank for rejuvenation of the rural area we have increased 71 million RMB. So for this increment and the proportion has all making the record high in the past 10 years. So there's a newly added one is 94.4 million RMB. And for this seed industry is up by 46% helping the Chinese rural areas and farmers to have that. So we have 1.6 trillion RMB for the loan and 160 county with this poverty lifting key aspects and areas that we have given them a huge amount of loans. And we have already been rated as excellent for that. The fifth one is we have implemented this overall quality of the loan. So compared with each one, we have about .02% of this bad loan and we are alleviating the risk and preventing the risk from getting worse. So we also have this precaution method to coordinate the risk of solving and protect the rights of the house buyers. And we have 5.37 systematic modules to have 100% coverage of all this high risk aspects and accident aspects. So next one ABC will fully implement with the state council and the central government deployment to have the high quality development. So that's my overall introduction for each one's operation. Now let's come to this interaction session. I will first have this onsite interaction with online communication in the middle. We try to take care of all the friends and the analysts present today. Please only ask one question per person. And when you ask a question, please first introduce your name and the name of your institute. So now we'll start. We'll have with us the first question. So what about we start from the one on my left. So this person, first row on the left. So thank you so much. I am CCTV journalist, I'm coming to ask you something about the loan. So in July we have seen it's a significant job with the social financing. I wanna know what is the situation of ABC? So it's already coming to the end of August. So this information of July and August that have already been seen. So what about the H2 fast credit expansion? How do you maintain that? Thank you so much for the question. We will have the answer. So before answering your question, I will just say to all the friends from the media and all the analysts, I would like to say welcome and thank you. It's about more than three years. We haven't got this kind of offline -to-face communication. And because of pandemic control and prevention, a lot of friends who hoped to come to our offline conference, they are still online. So no matter if it's from online or offline, I would like to say thank you. I hope for this kind of a method for the next about 1.5 hours, we could have a more in-depth and happy communication. So let's come to the CCTV journalist question for July with the multiple factors, the social financing data has decreased greatly. And in July for Agricultural Bank of China, we have still got very stable loan issuance. So according to the central bank's data, we have about 168.1 billion RMB. So compared with July last year, it is up by 37.8 billion RMB. So you mentioned that July compared with last July, we have got a big decline. However, from our own bank, our own data in July, we actually increased a lot compared with that of last July. So the second question you proposed is for the follow-up credit issuance and loan issuance, how would that be? So I think this is a very important question for this macroeconomic operation and the operation of the bank for H2, it's all very important. So I would first talk about the conclusion. For July and August, we have already come to the 29th of August. And we can actually say that for our issuance of credit and loan for August, it will exceed that of last year's data. So for a single month loan issuance, they have all exceeded the same amount that is had in last year. So we still have four months to go for 2022 from September to December. We judge that this kind of credit increase, surpassing the amount YOY, we think it could probably be maintained for Agricultural Bank of China. And this is our judgment. And for September to December, our credit increase will exceed that of last year, probably it could be maintained. And why we are making the judgment like that. So I'll first talk from our own bank. So for current credit reserve, we have already approved, but yet to be issued credit reserve, we have done this analysis until the end of July for this two business loans have already been approved is 2.12 trillion RMB. It is already being approved, but not being issued. So compared with that of last July, it's up by almost 600 billion RMB. So until last week for this kind of reservation, it has up to 2.47 trillion RMB. It is almost 800 billion higher than last year YOY. And indeed, as I said, no matter the 2.12 trillion or 2.47 trillion, they are not necessarily being issued. So maybe in the whole process, maybe they will just go to other different banks to have this final loan being collected and maybe not necessarily from our ABC, however, for two business credit reservation. I would like to say that compared with last year, we still have a quite stable reserve for that. And of course, for this kind of credit reserve, I would like to say that this is like weaker than that. However, if we from this reserve aspect for this newly added one, it could make up for this a declined one of this personal loan issuing. So this is from ABC's perspective to do the analysis of our own credit reserve. So the next thing is from this macroeconomic operation, let's talk about our own situation for this number disclosed on 12th of August, especially the speed of loans, it has already been lower than our expectation as mentioned by the CCTV journalist. So we can see from

this data, and finally, we are actually in terms of the social finance loans increase, we are lower on a young year basis. This is just for now, and it's temporary. On July, we will be impacted by the increased amount of the Royal Sea market from the middle and long run. We can see that economic growth need to have a transformation, this is a transformative process, and we have a transformation from new energy to old energy momentum, and this is not necessary to be very smooth. So the data in July will not necessarily set for the trend and normally in July, and we still don't have a solid infrastructure, and it still takes some time to affect it more well, and we need to have a preparation. So on July, the actual work amount actually is under reservation, and we can see from the data of July that the M2 growth is more as the deposit amount, compared with last year growth hugely, and all the back, we need the growth of the bank, the deposit compared with the previous years, so this is a very good phenomena. And later with the policy support, I believe that we will keep a stable growth, and the expectation of the Royal Sea will be more stable. The urbanization process now had some slow down, so we hope that in the very long run future, we can take it step by step, and we will not have a large gap with very short period of time, and the dry situation actually, it doesn't necessarily set for the future trend. This is all a weak expectation and prediction, so when we look at the credit reserve of the bank, as well as our expectations and judgments for the macro economy, the COVID-19 situation, as well as the future trend in July, August, and the future quarter is from September to December, our growth amount actually has the trend to exceed and outperform the data from last year, this is our trend. So to put long story short, with the future, now we will invest more on the following directions. In terms of the reserve, we will focus on the following fields. Mainly, there are fields I'd like to mention to you. The first, we will further enlarge the investment of the credit and loans of the infrastructure project, and to further focus on the key projects of the infrastructure engineering, and second, we will also enlarge the percentage of county and city level loans, and certainly we will largely serve SMEs, and macro economies, and companies, and focus on manufacturing industry, and also support the essential housing mortgage loans amount, and that's all for my answer for this question, thank you. Thank you, Mr. Chairman, for your systematic and comprehensive answer on this question. Next, we would like to welcome the next participant to raise up the question, and the first gentleman at the third row, please raise up your question. Thank you for giving me this opportunity, I'm now a shift analyst, and now we mentioned we focus about the rest in real estate industry, so I want to know that what's the exposure or gap of ABC in terms of public housing real estate loans, what's the asset quality trend, has the real estate risk been fully reflected? And first of all, thank you for goodness sacks for this question, and I think we all focus and pay attention to this, and ABC has always following on this concept that that is the real estate is for living, not speculation. So it also decide on our loan policy, we need to meet the reasonable demand of the real estate industry to support the vertical circulation, and we also this year, this month of 2.9 billion with a growth rate of 1.49%, in the first half we placed about 100 billion and 110 billion with a growth rate, and actually with this pressure in the additive amount loan, and the balance is about 30 billion, growth by 5.3 billion, growth by .58% compared with the previous years, and for some companies expand very fast, they had also the risk of frost expansion, and we can see that the residue and balance is not very sufficient, but we have the risk under control, the second half of ABC will follow the deployment of the city council as well as the central bank to seek to the focus on the best development and stability on the credit assets, we will enlarge the financing and fundraising of real estate to make sure the stability and the smoothness of the fundraising in real estate industry to satisfy the reasonable fundraising requirements of all kinds of real estate and real estate industry, and for the materials, we need to focus on the livelihood features and to focus on the public projects, and on one hand, we need to further enhance the risk control capability to avoid and prevent the risk and not use one of the formal method to all the companies, and second, we need to enhance monitoring of the risk to further have the whole process of risk control and prevention, and to also try to mitigate the risk in the industry, and with the MA and other financial methods, we will work with the local government to provide a good support in terms of financial services. Thank you, and next, we would like to welcome the next participant to ask a question, what about the gentleman sitting in the last row in the middle? Okay, thank you for giving me this opportunity, I'm Xu Yan, an author analyst, and we noticed that we also encourage the facts, especially large facts, in Q1, ABC had a little poor performance, so what's the future prospect of your back in future? And thank you for your question, I will try my best to answer it on April 13th, the emissions requirement, and just being attached with the importance from the ABC, and we make conditions to the real economy to reduce the tax, and thus, we hope to improve the stability, and the provision coverage is 300%, and dropped by .2% compared with the beginning of this year, it's 1% higher, so this is the change you've just observed. Actually, in the future, what about the policy of the provision, and I think you are all concerned about this question, because it's highly related to your profitability as with ROI, and for the provision policies, I think it's included two aspects, actually. One hand, it's about the amount, the added part, the second is about the release of the reserve, and so actually, the provision rate is decided by this, and by these two aspects, in the future, the provision policy actually can be analyzed in these two aspects, first is about the newly added one, and the upgraded one, and for this part, we would like to take a prudent attitude, and the principle, according to the accounting standard, and the monitoring requirements to apply for it, and this is the best of the regulation requirement, as well as the accounting standard. The second aspect is about the reserved part, and what's our policy about this? We will, based on the requirements and demand of the management, to reasonably release the provision reserve, and thus, we can only support the development of the real economy, but also, on the other hand, support the investors, the ROI, to make sure the ROI can be remained at a relatively stable level, and this is about the next step, the provision coverage, this is about the words I would like to share with you. Overall, speaking, the provision coverage, provision coverage will continue to drop, step by step in the future periods of time, and this is being impacted by these two aspects, so what level it will drop to, it depends on the operation, the situation of the macro economic development, and just now, we talk about the release of the reserve, and it's actually based on the demand of a present macro management, so today, I would like to also take this opportunity to share with you about the follow-up questions that is about the valuation of the BACS, and just now, for the question you asked, actually, it's kind of related to the evaluation, the valuation of the market to BACS, I think it's under-evaluated, underestimated, and there seems to be a mistake that is the provision policy, we talk about the macro present attitudes, as well as periodical management, this is actually seems to be contradictory with the market operation policy, and I know that maybe you've done some research on this aspect, and analyze, I think that for some analysts in China, the BACS, they need to be subject to these aspects, so it's very hard to conduct the marketing-oriented evaluation towards China BACS, which results to the under-evaluation, so I think this is actually a misunderstanding, now in the market, if we look at the situation the whole world, we have a more clear picture, any BACS, actually, our special companies, they actually have the function of releasing, mitigate the risk, and remain the stability of the macro economy, so we have a economic downturn, when we squeeze the loans, this is not a good method, if we have a good macroeconomic development, which is the present attitudes that cannot necessarily get a good result, so I think that we need to have a more holistic view towards this, so I'd like to also appeal for all the analysts and friends, as well as friends from press, to make more interpretations, and to have more positive interpretations in this regard. In this way, the operation and the regulation concepts of the BACS actually are aligned in the whole world, this is actually the attitude and the way of working of the whole BACS, as well.

So this is why I would use this question to say something about this value assessment for the banks, I hope that you could make a positive one of this value assessment for Chinese banks, thank you so much, and for president's professional ones, so we will give this opportunity to the middle section, so the gentleman at the side in the middle section, thank you so much for giving me this question, I am Peng Bo, I would love to ask a question about the mortgage loan, I'm from City, you can see that for this overall mortgage loan, it's generally weak this year, so what is the situation of BACS, we asked the first one, what is the new issue of the mortgage loans, and secondly, the early repayment, what is the interest, and then what is the newly issued loan, and for the guarantee of this home delivery, what is the situation, and please also look forward to this H2 situation, but really this is so detailed question, and Mr. Ling is the responsible for this, I would like to have Mr. Ling to answer the question, thank you so much for the question, so since Q4 2021, ABC has conscientiously implemented this regulations, the requirements to have this reserve cycle and the cross cycle adjustment to directly support this urgent demand for home purchase, I have to say that personal mortgage has already maintained a quite stable development, so each one, we have 313.8 billion RMB and $1.8 billion, net increase is 102.5%, 16.62%, and for the business development process, we carefully implement this reduction of the payments and share the profit with the citizens, so for each one, newly issued mortgage loan rate, compared with last year, it was down by 20 BP, I have to say that this is the overall business development situation in the work, we also have a very in-depth understanding of a personal mortgage loan, on the one hand, it is related to all the different families, second is also related to the healthy development of the civil estate market, and later we also will increase this integration of mortgage, and we also further enhance the investment of this mortgage, the first one is we actively connect with this good, high quality brokers for secondhand homes, and then to have this business reserve for that, and the second is actively participate in this innovation, and we still have some key projects being researched, and according to this promote new projects, where we develop that in a mature way, and the next thing is implement this optimization of this credit issuance policy, so here we have already done a huge amount of work, including to simplify this application document, to adjust the threshold of the customer, and to improve this approval efficiency, the fourth is to expand the technological support, to fasten this IT system construction, to have this overall management and MIT team confidence, to better serve this home mortgage customers to have this technological empowerment, so for this pre-positioned one, and we have to say that we will just protect this building guarantee, and this is very important, I have to say that we have to have a very clear judgment, and we need to balance all the different parts of the relationship, and care about this reasonable support, and comprehensively improve this guarantee of this home delivery, so for risk of this delivery, we have 1,112, and the final one is 1,000, so this is a high risk loan, we mount to 12.3 billion, taking the whole proportion of 0.023%, so now we have already 746 projects being included in this local government guarantee of the delivery, and now 60 projects have already got the condition of being able to be delivered, and for small amount of residents choosing to repay the mortgage at an earlier way, it's actually based on their own financial planning, and it also has something to do with the current declining profit of this wealth management, and for this aspect, we have to speak to customer centric to give them convenience policy of the early repayment, and exempt the default payment, and based on this big wealth management system to target the service given to this mortgage customer to satisfy the customer's managing their wealth, and that's all for me to answer that. Thank you so much for Mr. Ling. So thank you so much, and I am Hu Yao, and we all know that ABC is in the leading position in the same trade in terms of the live customers on this mobile app, and in terms of customer conversion, what measures have been taken to convert from MAU to AUM, what is the current effect, and the next step, how ABC is planning to follow the trend of digitalization and make more services from offline to online to reduce this service cost. Thank you. And I would like to say that, so I understand there are three parts of your question, and the first one is about the development and the growth of this mobile app, and second is the conversion, and the last is how to reduce the cost and do that, so we can see that the mobile app is the major interface of all the different players, so we are using entire ABC's power to develop our mobile app, and here at the end of June, we have registered 434 million card holders, and for this monthly activity is 164 card holders, and it's up by 11.7 million, so for this increment, or the total amount is all taking the lead, so this is having absolute leadership, and this is what we are expanding for our leadership, and the second question is, AUM and MAU conversion, how do we view that? Actually, so for AUM, with a bigger amount, and MAU will also be bigger, with MAU being big, you could have a better AUM, it's hard to understand that one person having no money in the bank, and then their mobile app is active, so this is like we think that with the traffic to develop the product, and with the development to have that, and the thing we do recently is surrounding this overall customer journey to constantly optimize with the key business, and we can say that for this key business point, we could have even more than 10 different kinds of this optimization for this mobile functionality, and this is easier for the users, we can clearly see that, so we can see that the ABC growth is actually very big, and it's definitely like with a more than five digit growth, and the next thing is, for certain customers' products portfolio, we have done this country version, we have this medical insurance section, and car driver section to help the customers easily locate what they need, so with all those measures, our monthly active user for our AUM is 38.2%, is higher than any used one, so we can see that it's about 5.6%, that is to say that our development is high speed and high quality, this is what I want to answer you, and the third thing is how to lower the cost, first, how to understand this question, first of all, I would like to give you a number, so until June, our daily activity is over 28 million car holders, and we have about 2000 offline sites, so if without this mobile app, if they go to every offline service points, it will be over 2000 people per site, so on average, now it's about 70 to 80 visitors, and they come to this offline site, it will be like a quite average, quite normal, and if it's over 300 car holders coming there, they will have complaints, so that is to say that for our fixed cost, and for their efficiency has already been utilized, and this is what I want to say, without the mobile app, it's impossible for us to have so many customers being served in a high quality way, and this is the first one I want to answer, the second thing is, so our purpose is not necessarily like lower the cost, so lowering the cost is like the permanent topic as a listed company, however, we have to balance, the service, it's not just like making all the people to chase to the online one to lower the cost, we try to do the synergy of online and offline, and to give the best quality one, and we can also say that for some special people, they also will do the services offline, this is like giving full play to our online and offline advantages, I don't know whether I have answered your question or not, thank you so much, so we will carry on the QA session, so we will say line four of that section, thank you so much for giving me this opportunity, I am from CICC, I'm Lily Han, I would like to ask a question, it's about this interest rate gap, so what is the reason why we have like a lowered interest gap, and I wanna know that what are the prospects of this interest gap in H2 and how they stabilize that, so thank you so much, thank you so much for the question, and I say that for the management of this interest gap is a very important policy for us to manage our bank,

and we can see the net interest rate differential actually dropped compared with the previous year, and we can see that we're looking at the industrial trend, and the conversion have different reasons, and the major reason of this is because in our bank, we actually largely improved the green development, and scientific and technological innovation, and inclusive finance, and conduct lots of projects from January to June, in the company that the loan growth is by 8BP, so actually we also have the interest rate gap, and I like to see that although we have the decrease of the net interest margin, but our bank actually in the first half, in the first half, the interest rate and net margin growth is over 6%, and that was all compared with the same period of last year, so this is the current situation of the net interest margin management, and what do we look at the future trend about the interest, net interest margin, and I think that we will see is that an asset side will continue to give possession to the real economy, and then there will be a drop to some extent, and last year in last June, the deposit interest rate reform, as well as this January about the marketization of the deposit interest rate, and we continue to optimize the population, and to mitigate the cost increasing pressure, and now the individual deposit is about 14 trillion, and this is actually the maximum amount among all the debt, and this will actually be very important guarantee for the civilization of the net interest margin, on the other hand, we continue to further enhance the innovation and to also enlarge the capital, and to also enlarge the loan issuing to the several industries to support them, and we will also pay attention to mitigate the pressure of the loan interest rate drop during the second half of the year, the net interest margin of our back will be actually drop a little bit, but overall we can keep our stable weight, this is the trend of Nefsat, and we follow the deployment of the CPC Central Committee and City Council, and we will continue to also give further concessions to support to real economy, and to remain a dynamic balance of different business, and to further improve the efficiency, and we will focus on the work of the aggregate structure, as well as the quality, et cetera, to keep a good balance in the second half, but we will also enlarge the investment to support and meet the requirements of the real economy, and regularly continue to improve the capability of customer acquisition to keep a stability and growth of the profit 30, and we also consider the original and industrial customers' difference, and we'll continue to have the comprehensive management to which the restructuring, we will stabilize the balance of the net interest margin, and we will also have the management, and to have the interest rate management strategy, et cetera, and to have differentiated pricing to further enhance the service to the customer, and thus we can actually mitigate the risk of interest rate drop, so we have confidence to guarantee the stability. Okay, thank you. Now we'll continue with the next question. The lady from the left row, please raise that question. Thank you, I'm from news agency. All the test data of the first half, the MPL as well as the overdraft, and now due to the COVID as well as the market's function, how do you look at the MPL pressure, and in what ways will you offset and stabilize the development? Okay, thank you for your question, and thank you for your concern of the data, and I think that actually there are a lot of the impact of the macroeconomy, which also cause some pressure of the asset quality. This is actually issues we all confronted with, and we highly pay attention to these issues, and we also introduced some data already. Now I will give you more details to share with you our results. The first is about the asset quality kept stable by the end of June APL, it's about 260 betting, growth by 1.8 betting, and the comparables are 0.02%. And first half, the MPL dropped by 5.6 betting, and the overdraft is about 180 betting, and the overdraft rate is 1%, and dropped by .18% compared with the beginning of the year, and compared with the beginning of the year, the also dropped by 0.42%, and we have also a very good asset quality. So for the non-MPL, we have very stringent standard, and for the loans over the four overnight days, it's included into non-performing loans, and this percentage altogether calculated dropped largely compared with the previous year. So you can see we have a very strong risk mitigation and the resistance, and due to the pandemic, many industries have been impacted largely for the botanical industry, catering industry, across the mass ME, and micro economies, we also see the pressures, and we have the pressure for overdue non-performing loans, and this will also impact the asset quality. So on one hand, we like to support the company to have dynamic monitoring, and so the pressure tests of this company to control the overall risk. And then next step, ABQ will have a implementation of our philosophy to perform the duty of our bank to keep the stability of the market, and to also increase the risk control and to take measures, and to further optimize the NPL to put more resources in rural area revitalization, SME as well as green financing, et cetera. Second is we will have a coordinated development to further have a contingency plan of risk control to also have the diversions to avoid the upward threshold of the risk, and also to build the capability, especially the digitalization, and to leverage the public technology to identify the risks, and to support the funds and the stability of our credit work, credit issuing work. And let's continue with next question. The lady from the third floor in the middle, please raise a question. Dear management team, I'm from Shanghai Security News, I'm out to ask you about the question of the driver of profitability of the first half, and now we have more risks, so how do you predict the predictability growth rate of the second half? And I'd like to let our leader answer a question. In the first half, the overall driver of the profitability of the first half, there are several drivers. First is about we actually have a very good synergy with the real economy, and we know that we have a relationship of coexistence with the real economy, and we give more profit and concessions to the real economy to stabilize the income, and revenue, and growth. And just now, our president also talked about this in the previous questions, and covered about this project. The first half, we actually give more concessions to the real economy. The newly issued loans, the interest rates dropped. It's actually performed as a drop of LPR. So by reducing the fundraising cost of the economy to expand the efficient demand, in the first half, the predicted assets still grow by .8% compared with previous year, and also the revenue growth by 5.9%. And the interest rates dropped, actually, up from the drop of LPR, so it gives a lot of concessions to the real economy. And we also penetrate the demand potential, and our revenue grew by .9% on -on-year basis. This is the first point. And secondly, it's about the asset quality, which is kept stable. And just now, the journalist from the news agency asked about the question of asset quality, which this question has already been answered. And in terms of the quality, asset quality, we achieved a good result. It's actually due to ourselves, the improvement of the management level. And second, it cannot be achieved without the macro policy support to everything and the market entities. It's highly relevant. In the first half, we had some challenging macro economy. I know you've all noticed about the physical policy and management policy, which actually further tap the potential. And the first, to make sure it helps the market entities to have a sustainable development, to stabilize the fundamentals of the macro economy. This is the solid foundation. For that... And this large amount of market entities can be protected. And this largely mitigates the pressure of the back. And in terms of the asset quality, in the first half, the back kept it stable. And this is about the profitability and second driver of the profitability. And thirdly, we also mentioned previously about the accumulation in the early stage. The probation reserve have been released continuously. And in the early stage, we accumulated a large amount of balance residue. And when at the most necessary time in the economic and society development, with the most emergent need, we already and periodically release the residue and balance to promote the stable growth of the profitability. This is also another driver. And just now you asked about the question. The second part of the question is about the profitability post-batch. So in the second half, I think that we are very confident towards China's economy. We think that we have a bright prospect of economic development in the future. So I believe in the second half, our best profitability will keep a stable growth. And we are confident to give a high-quality questionnaire to our investors and customers. And we are truly confident that in the long run, China's economy is very promising. And we will also witness some function in terms of the data. Actually, because this is actually, they do some functions. And in the second half, with the implementation of multiple policies, I believe that the mass economy will grow and turn to a more stable development.

The second thing I wanna say that from ADC's own characteristics, we are a like a with uncertainty and challenges. Why do I say that? Because ADC is crossing cities and county level and villages. 50% of our presence is the rural area, 50% is in the urban area. This is the unique characteristic of ADC. So with this kind of a feature, we're making a, like we will have a deeper mode when we are faced with the uncertainty. So recently, we have proposed that for our positioning, our strategy, and we have positioned ourselves with two different aspects to develop this. One leg is trying to serve in this rural rejuvenation. One is serving this solid economy. So we really stress this rural area and the digital economy, the green finance. So for county level and rural area, we place it as a very important aspect. for the credit demand, the overall compressory speaking or weaker situation, I have to say that for our county level layout and our customer base, it has given us great support. I have several data to share with you to prove that. For this overall credit structure of ADC, you can see our interim report for our county level loan. It takes about .5% of our entire loan bank wide. In H1 this year, for our key aspect for the increment of our county level loan increase, it takes about 50% of that. For example, our library preferential loan, it takes about 50% of the entire bank wide issuance. For example, infrastructure loans, it's also 50%. On the form of green finance, for county level it takes the 47%. For manufacturing industry, county level takes the 43%. And for personal loan, for county level, it takes 62%. The reason why I say all of these is that for ADC, it covers the rural area and the urban area, we are more resilient. And the third confidence is we have this digitalized restructuring and transformation, and it has made our internal management level has been improved significantly no matter if it's internal marketing or risk management. For example, for each loan, for our online loan, it's already 2.7 trillion IRB, and the growth rate is 7.5%. We're constantly upgrading this risk recognition. And there was a very diversified risk pre-warning and monitoring model to improve this financial risk management convenience, and timeliness and effectiveness. Which is also why we say that for each one, for our entire loan quality with such uncertainties, we still could maintain quite good situation. This is our internal management level improvement. This is also the embodiment of that. And lastly, I would like to say that for our, we have this provision coverage, it's very good, and they've made a very good foundation for our orderly development afterwards. So that's my answer for the future ABC development and the stable growth to have this sustainable return to the investors who are still very confident. Thank you, thank you so much for your question. Thank you so much for President Agourou for this in depth and careful interpretation. Thank you, and I welcome the next question. We will still give the question to the one on the left. So the gentleman over there in the left section. Thank you so much, management team. I am from 21st Economic News. This year, the market fluctuates greatly, and many wealth management products are actually making a lot. So how can ABC's wealth management benefit the customers? And previously, we have already got with the first ever aged pension wealth management and how ABC can seize the opportunity for pension finance. Thank you so much. Thank you so much for the question. I would like to thank the 21st century for your concern of our ABC's wealth management. Our wealth management got established in August 2009. In the last three years, we have already got this technological transformation. I have to say that we have already taken very firm steps. Each one this year, we can see that it has already reached 2.13 trillion RMB. We have already maintained the card holders wealth management to 1.08 million. So I have to say that it has already become the absolute key aspect. Currently, we can say that it's already reaching 46% county level holders. At the end of June 2022, we have a .9% of the interest rate. It's up by 19BP of last year. So this is 110BP higher than the five year national debt. So here we have already delivered to our customers 24.9 billion RMB. So for the cash management products have already delivered 11.9 billion RMB. So for this open session, we have already delivered about 13 billion RMB. So we say that for the scale of the business and the efficiency of them, we all have maintained a certain effect. I have to say that for this national debt fluctuation, we have already reached this loss of our wealth management products have all maintained as the lowest one in the industry. So we could actually maintain this dynamic balance. We really could build a very good mode and protect that. So the work should be attributed to three aspects. The first one is with all effort to create this market leadership in industrial investment and the research. I have to say that the investment research is the most important competitiveness of our debt. And we say that we have to do three more here. The first one is more professional. And with our integrated team construction to have this macro policy, macro economic situation, judgment and analysis. And for our policy structure and the product functionality, we have to deep root ourselves in that. The second thing is extensively visit to the customers and the study and research the market to closely focus on the customer demand. And we will just improve this revolution. So the third is to have a more precise strengthening of this technological one. So we will just offer more comprehensive and more vivid data support. So this is the several aspects that we have. The first one is to have more scientific management and how do we better face with the market changes. So with the practices, we have already explored some effective methods. So we have concluded them as a full insistence. So the first one to insist as this absolute interest, and the profit, so as our target. The second means is to have this pre warning as the main characteristics to manage that. The third is to have this resilience of our asset arrangement. The fourth one to insist on this priority investment. So with our practice, with the full insistence, we could better create this positive for wealth management revenue. So the last one is to always stick to this prudent risk preference. So we believe that risk control is our bottom line and risk management is also our profit. So we first create this whole process embedded risk management system with our bank characteristics. The first one is to have this close management of the risk. And we also could have this product risk recognition. And we also could say that for our investment, we could look back and we can see that every year, we will do this certain arrangement. So the next thing is to focus on like what we have made and to strengthen this penetrative management, to make sure that all the risks could all be covered by us. And the last thing is about this asset categorization. So we can see that we don't have any bad ones and we also could have this better operation. So for this, we could have this pressure test, periodically and non-periodical ones and to have this pre-warning and to have this bottom line being safeguarded for our customers. I have to say for the investment team, I would say that for professionalism and professional skills, we really recognize their professionalism. The next step is we will stick to this being professional and with the professionalism to protect our core business and investment portfolio, including this integrated resources and scientific allocation of the assets and conscientiously company the customer. And we would hope to remain calm when the market is booming and when the market is being very low, we will also try to be calm. So we hope that we've used our attitude of serving the customers to benefit all the customers to fasten this high quality development with our due contribution. So for this pension, wealth management and the pension financing, as you mentioned, I really agree with that. And we just say that this is like the vast sea and this abroad side. So it has a huge space. Until the end of 2021 for our pension financing, it has about 67%, 29% and 4%. And we can see that with the fastening of aging society, we need to strengthen this third aspect of our pension financing is, I have to say that it will cover billions of Chinese people's pension requirements. So for ABC, we have to use our solid and professional service to transfer it into this great development. So 18th of August in Beijing, Qingdao and Chongqing, the 10 pilot cities, we have proposed the first batch of the pension wealth management products. Before coming here, I have already checked that 10 days, the sales scale is already reaching 18 million. So we expect that the next year it will all be sold out. So after 10 days, we'll have this huge amount of sales. I would like to say that the customers are really agreeing with this.

So conclude for the pension finance, we have several features. First is the stability of long-term investment. And second, we actually want to more have civilized investment and to further do the inclusive pension finance. And here we actually created 50 as a first target for the operation of these products, opposing browsers. Because due to some issues, for example, the difficulty for the wealth management product of the age, the people, we have some terrible conditions. And now we have a point 600 million to meet dual customers and the comfort of the month. And now for the pension card issue, it's about over 2.7 hundred million. And over 17.5 trillion overall. So for the senior finance service, actually it's very important for us. And it's also our responsibility to serve people and serve the age and we'll continue with this work. Thank you. Thank you for your answer. And next we would like to leave this question for the participants who joining us from online. And we collected the questions of the investors joining us online. So we would like to select the questions that we are all concerned but haven't been addressed in the previous part. So I'd like to read out this question. This question is related to the inclusive finance. And over the past years, the inclusive finance business grow very fast. Now the percentage is about 10%. And the cost number is over two million. So I'd like to ask how to optimize the account opening service for SME, for micro companies and how to leverage technology to have a high quality development that includes the business. Okay, before I answer this question, I'd like to first give you a report about our performance so you can have a more good impression of our business in this regard. For us, for SMEs and micro companies, this is about 1.7 trillion and growth by 300 billion. And we have about 2.4 million accounts growth by about 450, 500,000. And the NPL was the controlling reasonable level and to largely lower the cost and control the risk. And for the NPL, we also improved it a lot. And it's been achieved by two aspects. And just now in the question, also asked how to optimize account opening service for SME, micro companies. We actually have a technology leverage in this with RPA technology as far as electronic that slices to optimize this process. What's RPA? RPA is the set of software. So you can actually have all the transactions of the customer connected. So the data can be streamlined. And after business using technology, the average account for opening time is the industry average is about three days, three working days, but we can reduce that by one working day. And it's confirmed to the principle for SMEs, confirmed to the requirements of central bank. We can actually open an account within only one day. And this way we largely improve the service and efficiency in the second day about how to leverage the technology to increase the high quality development. And that I'd like to answer this question in three aspects. The first one, largely innovate the product within rich product to satisfy the diversified fundraising requirements of the small customers. And for example, to further accomplish the system and to optimize the categorization, product innovation mechanism, and to provide online service, customized service as well as batch service, credit and product and service. And also to leave the advantage of the ABC to have the synergy of online, offline. And for ABC, the biggest advantage of us is about the offline. We have about 23,000 outlets online. We also have the comprehensive network. So it's actually a very strong network resources customer resources, the online, offline. Soon as it will be the next target of our work to mainly push the inclusive finance to actually leverage our network and online, offline synergy to penetrate the inclusive finance to reach to more customers. This is the second aspect. And the third, we need to use the technology to empower to improve the management capabilities that we have to share with users. First is to have more technologies, lower the cost, improve the efficiency. On my hand, and secondly, with the digitalization technology, we can have the accurate customer acquisition and customer identification to lower the cost. And certainly to digitalization technology to control the risk, to lower the cost and the risk of the inclusive finance loans. And that's all from my answer for this question. Thank you very much. Okay. Thank you. So a comprehensive answer of this question. And the next we will continue with the onsite question. And the lady in the first row as a right-hand side please raise a question. Thank you, dear leaders. I'm Anastasia Houdin from my own security. I'd like to ask a question about the credit issue. And in first half, we can see the weak requirements of real estate industry. ABC in the first half have a strong performance in this regard. And to compare with the last year, the growth rate is 19.5%. So my question is what field credit growth offset the gap of real estate industry? And what's the issue in plan of the second half and what's the target industry? And actually this question is very similar to highly relevant with the question from the CCTV. Is there like to talk about the details of development and what aspects offset the gap of real estate? Firstly, I'd like to see about the county level. And in county level, we have a fast growth. In the first half, the growth contributed to nearly half percent. Half of the additives is about 37% of the reserve and the service. 37% additives are reaching nearly 50%. And the balance of county level loans is about 2.9 million, a trillion, and growth by zero million yuan, 70 million. And the percentage reached a core high over the past decade. This is the highest in the past decade. And for the farmers, the loans balance is the OECD 750 billion. So on second hand, we improved the efficient investment and larger work on this. And in terms of the infrastructure, it was not the balance. So balance reached about 4.13 trillion. This is not actually the major aspect of our business, but in this year, in terms of the infrastructure construction, we also enlarged our issuing to larger support and expand the efficient investment. And we all know the financial tool, we have about 300 million of the national development back, which is different from that of the commercial back. On slide 31, and in Zhejiang, we issued loads of 1.3200 million to a highway project in Zhejiang. And this is actually a supportive fundraising of another project. And this was done by the Agriculture Backup China, Zhejiang branch in slide 31. And for the approved amount, now it's over 110 million get approved. And we've already covered 25 projects, as well as the issuing of phase five billing. And this is about the infrastructure construction. And next one is about inclusive finance for the small and micro companies, which we realized the faster growth. And so the balance is about 1.7 trillion growth by 370 billion, compared to the beginning of the year with a growth rate of 28.4%. And this additive amount as well as the growing seed actually taken for the inclusive finance, we actually compared with the beginning of the year is brought up by 15 trillion. We made a lot of improvements to the technology to make sure the additive amount is taking the lead for the first half. And this is the third field, the fourth field is about the high quality development and transformation of the economy. For example, the green credit, the emerging strategic emerging industry, the manufacturing industry. And for manufacturing industry, the balance breaks through 2.1 trillion. And the newly increased is about 420 billion, with a gross rate of 24.5%, amount which the mid and the long term long growth by 34%. The green credit balance is about 2.37 trillion, compared to the beginning of the year to grow by 20.1%. And so strategic emerging industries, long balance reached 1.1 trillion yuan, compared to the beginning of the year to grow by 29.2%. So we can see in this field, the growth rate of the loans in this field exceeded 20% including the company of the loans. We have very optimized growth rate. And it's offset the other aspects. We're looking to the future for the second half. We will not think our policy in the second half, we will continue to focus and push in this industry to work all round ways to support the real economy, to support the development, to provide a robust financial service. And thank you for your question. And thank you Chairman for your answer about those strategies and the tactics. And in today's meeting, we see a very inspiring, very comprehensive, and we are reaching to the end of this event. So we will have only one question. Now this lady is in the middle region, please, there is a question. Thank you, moderator. I'm the journalist from Wang Hui. And I'd like to also ask a question about the green finance. So the question is, you mentioned about the growth rate of 20% in the green credit. So what's the highlight of our performance? And now the balance is about 2.37 trillion. What's the quality of the green credit and green loans? And what's the yearly issuing target? And which are the major areas of issuing? And compare with the rest of the common products, what's the difference of green loans? And what's the criteria to select the customer of a green credit? What's the credit reserve situation? Thank you.

I have to say that this is like a large scale of extreme climate and changeable climate. This is like a heated question. I would like to have President Xu Guang, who is responsible of this aspect. We would like to have him to answer the question. Thank you so much. And from Hong Kong, I'm very honored to answer the last question. This is closely related to the positioning of ABC because the green color is our base color of ABC. Green development is also the chain of our development. And ABC is the conscientiously implementing the carbon picking and carbon neutrality. So with this as one of the three strategies of our bank. So for the selling point, there are three different. The first one is the fastest seed of development. This is far exceeding the speed of our development. So just now the president has also talked about this, but I wouldn't talk too much about that. And so the credit one, we have issued this green issuance. And it has about 135% of growth rate for our in-house balance. This investment is over 100 billion. It's up by 20% compared to the early days of this year. So our green credit is closely related to energy conservation and pollution reduction for environmental protection, environmental protection and energy saving. It takes more than 90% of the credit issued by us. And till the end of June, we have already got this carbon reduction found is 29.5 billion. This is chasing the lead. Compared with other counterparts. So for our cost of green financing, it is continuously being lowered. It's a 3.78%. It's lower by 42 BP. It is bigger than the reduction of LPR. And now it's a .53% of the interest rate. So the quality is still pretty good. And we have kept a very good reject rate and the non-performing rate. So for the next step of the green one, and we are focusing on this overall support direction. The second thing is we have strengthened the cooperation with different ministers and to have this key stage of the development and with this excellent company's cooperation, for example, for Yangtze River protection with this three gorgeous groups. We have already got a very good one. And we also have given the most protection. We also helped with people's bank to constantly with our own contribution to the carbon, peaking and carbon neutrality target with our own contribution. Thank you so much for your answer. The warmth and great dedication. So ladies and gentlemen, this is the first ever we do this offline and the internet and the telephone way, the three in one way of this conference. So the atmosphere at the scene is very lively. Online questions are also very enthusiastic. A large number of people are attending on the telephone, which reflected the high concern and the high expectation of investors, analysts and friends from the media for the performance and development of ABC. I think that we are still like feeling reluctant to go that we will have Mr. Gu to have this conclusion for all the concerns and the problems carried by the analysts. It's already one and a half hour. I think it's already been a long time. So I will just briefly say something I would like to conclude. And I would like to use the one word to conclude the H1 operation of ABC and for the future direction of the operation. I would like to say we like resilient, very resilient. And indeed, we could most accurately conclude the future and the past. So resilient is we are faced with a lot of challenges. We could be more resilient. And for this resilience of ABC's operation, first of all, it should be attributed to the resilience of a Chinese economy. So this is the first reason. And second is also like this, customer base of ABC crossing the rural area and the urban area. And we also have said the two major positioning as the leader as this rural rejuvenation all this the main contributor to that of this solid economy construction faced with the future uncertainties. I believe there are some challenges like a deeper understanding and we will have a deeper mode. And with a lot of uncertainties and challenges for ABC, we have like a higher resilience and the company we should have a higher investment value. That's my last conclusion. I would like to thank you all one more time. Thank you, that's my short conclusion. So that's the end of our performance announcement. Thank you, goodbye.